Note

- Segment Information

In accordance with Accounting Standards Codification No.

280

Segment Reporting

the Company routinely evaluates whether its separate operating and reportable segments have changed. This determination is made based on the following factors:

(1)

the Company’s chief operating decision maker (“CODM”) is currently managing each operating segment as a separate business and evaluating the performance of each segment and making resource allocation decisions distinctly and expects to do so for the foreseeable future, and

(2)

discrete financial information for each operating segment is available.

The Company’s reportable segments are: (i) Completion Services, (ii) Well Support Services and (iii) Other Services. This segment structure reflects the financial information and reports used by the Company’s management, including its CODM, to make decisions regarding the Company’s business, including performance evaluation and resource allocation decisions. The Company revised its reportable segments during the

first

quarter of

2015

in connection with the Nabors Merger. As a result of the revised reportable segment structure, the Company has restated the corresponding items of segment information for the

2014

year. The following is a brief description of the Company's

three

reportable segments:

Completion Services

Completion Services consists of the following service lines:

(1)

hydraulic fracturing;

(2)

Casedhole Solutions, which includes cased-hole wireline, pumpdown services, wireline logging, perforating, pressure pumping, well site make-up and pressure testing and other complementary services;

(3)

well construction services, specifically cementing and directional drilling services; and

(4)

R&T, which is primarily engaged in the engineering and production of certain parts and components, such as perforating guns and addressable switches, which are used in the completion process.

Well Support Services

Well Support Services consists of the following service lines:

(1)

rig services, including workover and other support services primarily used for repair and maintenance of oil and gas wells, re-drilling operations and plugging and abandonment operations;

(2)

fluids management services, which provides storage, transportation and disposal services for produced fluids and fluids used in the drilling, completion and workover of oil and gas wells;

(3)

coiled tubing services, primarily used for frac plug drill-out during completion operations and for well workover and routine maintenance;

(4)

artificial lift; and

(5)

other specialty well site services.

Other Services

Other Services consists of smaller, non-core business lines that have either been divested, or are in the process of being divested, including the specialty chemical business (divested in

2016),

equipment manufacturing and repair business (in the process of being divested) and the Company's international coiled tubing operations in the Middle East (operations ceased in

2016).

The following tables set forth certain financial information with respect to the Company’s reportable segments.

	Completion Services			Well Support Services			Other Services			Corporate / Elimination			Total
Year Ended December 31, 2016
Revenue from external customers	$	543,958		$	419,597		$	7,587		$	—		$	971,142
Inter-segment revenues		1,049			224			29,115			(30,388	)		—
Depreciation and amortization		131,237			84,105			2,307			(209	)		217,440
Operating loss		(253,513	)		(430,808	)		(51,778	)		(133,909	)		(870,008	)
Net loss		(253,845	)		(426,716	)		(58,757	)		(204,971	)		(944,289	)
Adjusted EBITDA		(39,628	)		17,460			(5,777	)		(66,897	)		(94,842	)
Capital expenditures		15,622			16,295			8,451			17,541			57,909
As of December 31, 2016
Total assets	$	692,437		$	557,292		$	52,978		$	58,894		$	1,361,601
Goodwill		—			—			—			—			—
Year Ended December 31, 2015
Revenue from external customers	$	1,138,521		$	582,142		$	28,226		$	—		$	1,748,889
Inter-segment revenues		4,276			226			150,754			(155,256	)		—
Depreciation and amortization		170,452			100,858			5,159			(116	)		276,353
Operating loss		(754,874	)		(159,165	)		(69,129	)		(115,154	)		(1,098,322	)
Net income (loss)		(755,704	)		(163,103	)		(68,584	)		114,849			(872,542	)
Adjusted EBITDA		39,851			79,966			(1,327	)		(71,734	)		46,756
Capital expenditures		79,211			55,612			30,444			1,054			166,321
As of December 31, 2015
Total assets	$	968,438		$	1,045,223		$	124,328		$	60,963		$	2,198,952
Goodwill		—			307,677			—			—			307,677
Year Ended December 31, 2014
Revenue from external customers	$	1,400,133		$	188,256		$	19,555		$	—		$	1,607,944
Inter-segment revenues		366			122			228,162			(228,650	)		—
Depreciation and amortization		86,514			18,184			3,796			(349	)		108,145
Operating income (loss)		187,615			28,471			16,579			(108,921	)		123,744
Net income (loss)		187,536			28,471			16,029			(163,213	)		68,823
Adjusted EBITDA		274,113			46,689			20,375			(88,231	)		252,946
Capital expenditures		254,455			57,817			9,240			(13,914	)		307,598
As of December 31, 2014
Total assets	$	1,218,005		$	209,490		$	186,908		$	(1,657	)	$	1,612,746
Goodwill		200,149			15,085			4,719			—			219,953

Management evaluates reportable segment performance and allocates resources based on total earnings (loss) before net interest expense, income taxes, depreciation and amortization, other income (expense), net gain or loss on disposal of assets, acquisition-related costs, and non-routine items (“Adjusted EBITDA”), because Adjusted EBITDA is considered an important measure of each reportable segment’s performance. In addition, management believes that the disclosure of Adjusted EBITDA as a measure of each reportable segment’s operating performance allows investors to make a direct comparison to competitors, without regard to differences in capital and financing structure. Investors should be aware, however, that there are limitations inherent in using Adjusted EBITDA as a measure of overall profitability because it excludes significant expense items. An improving trend in Adjusted EBITDA

may

not be indicative of an improvement in the Company’s profitability. To compensate for the limitations in utilizing Adjusted EBITDA as an operating measure, management also uses U.S. GAAP measures of performance, including operating income (loss) and net income (loss), to evaluate performance, but only with respect to the Company as a whole and not on a reportable segment basis.

As required under Item

10(e)

of Regulation S-K of the Securities Exchange Act of

1934,

as amended, included below is a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net income (loss), which is the nearest comparable U.S. GAAP financial measure (in thousands) on a consolidated basis for the years ended

December

31,

2016,

2015

and

2014,

and on a reportable segment basis for the years ended

December

31,

2016,

2015

and

2014.

	Years Ended December 31,
	2016			2015			2014
Net income (loss)	$	(944,289	)	$	(872,542	)	$	68,823
Interest expense, net		157,465			82,086			9,840
Income tax (benefit) expense		(129,010	)		(299,093	)		45,679
Depreciation and amortization		217,440			276,353			108,145
Other (income) expense, net		(9,504	)		(8,773	)		(598	)
(Gain) loss on disposal of assets		3,075			(544	)		(17	)
Impairment expense		436,395			791,807			—
Immaterial accounts payable accrual correction		—			(13,190	)		—
Acquisition-related costs		10,534			42,662			20,159
Severance, facility closures and other		31,498			5,849			35
Customer settlement/bad debt write-off		1,113			7,997			—
Incremental insurance reserve		—			3,035			—
Insurance settlement		—			—			880
Debt restructuring costs		30,401			—			—
Reorganization costs		55,330			—			—
Inventory write-down		35,350			31,109			—
Legal settlements		1,020			—			—
Share-based compensation expense acceleration		7,792			—			—
Insurance reserve true-up		548			—			—
Adjusted EBITDA	$	(94,842	)	$	46,756		$	252,946

	Year Ended December 31, 2016
	Completion Services			Well Support Services			Other Services			Corporate / Elimination			Total
Net loss	$	(253,845	)	$	(426,716	)	$	(58,757	)	$	(204,971	)	$	(944,289	)
Interest expense, net		706			(145	)		—			156,904			157,465
Income tax benefit		—			—			—			(129,010	)		(129,010	)
Depreciation and amortization		131,237			84,105			2,307			(209	)		217,440
Impairment expense		69,822			357,817			8,756			—			436,395
Debt restructuring costs		—			—			—			30,401			30,401
Reorganization costs		—			—			—			55,330			55,330
Other (income) expense, net		(374	)		(3,947	)		6,979			(12,162	)		(9,504	)
(Gain) loss on disposal of assets		(769	)		(4,192	)		3,060			4,976			3,075
Severance, facility closures and other		7,601			3,978			7,558			12,361			31,498
Acquisition-related costs		202			—			209			10,123			10,534
Share-based compensation expense acceleration		—			—			—			7,792			7,792
Customer settlement/bad debt write-off		375			738			—			—			1,113
Legal settlements		—			—			—			1,020			1,020
Insurance reserve true-up		—			—			—			548			548
Inventory write-down		5,417			5,822			24,111			—			35,350
Adjusted EBITDA	$	(39,628	)	$	17,460		$	(5,777	)	$	(66,897	)	$	(94,842	)

	Year Ended December 31, 2015
	Completion Services			Well Support Services			Other Services			Corporate / Elimination			Total
Net income (loss)	$	(755,704	)	$	(163,103	)	$	(68,584	)	$	114,849		$	(872,542	)
Interest expense, net		358			(41	)		—			81,769			82,086
Income tax benefit		—			—			—			(299,093	)		(299,093	)
Depreciation and amortization		170,452			100,858			5,159			(116	)		276,353
Impairment expense		617,047			134,331			40,429			—			791,807
Other (income) expense, net		472			3,979			(545	)		(12,679	)		(8,773	)
(Gain) loss on disposal of assets		287			(899	)		19			49			(544	)
Acquisition-related costs		—			—			46			42,616			42,662
Severance, facility closures and other		2,303			2,248			608			690			5,849
Inventory write-downs		8,620			1,153			21,336			—			31,109
Customer settlement/bad debt write-off		4,269			3,728			—			—			7,997
Immaterial accounts payable accrual correction		(10,552	)		(2,638	)		—			—			(13,190	)
Incremental insurance reserve		2,299			350			205			181			3,035
Adjusted EBITDA	$	39,851		$	79,966		$	(1,327	)	$	(71,734	)	$	46,756

	Year Ended December 31, 2014
	Completion Services			Well Support Services		Other Services		Corporate / Elimination			Total
Net income (loss)	$	187,536		$	28,471	$	16,029	$	(163,213	)	$	68,823
Interest expense, net		463			—		—		9,377			9,840
Income tax expense		—			—		—		45,679			45,679
Depreciation and amortization		86,514			18,184		3,796		(349	)		108,145
Other (income) expense, net		(384	)		—		550		(764	)		(598	)
(Gain) loss on disposal of assets		(51	)		34		—		—			(17	)
Acquisition-related costs		—			—		—		20,159			20,159
Severance, facility closures and other		35			—		—		—			35
Insurance settlement		—			—		—		880			880
Adjusted EBITDA	$	274,113		$	46,689	$	20,375	$	(88,231	)	$	252,946